March 18, 2020 / 11:10 AM / 17 days ago

Bank of England lends $15 billion to banks, most since financial crisis

FILE PHOTO: A bird flies past The Bank of England in the City of London, Britain, December 12, 2017. REUTERS/Clodagh Kilcoyne/File Photo

LONDON (Reuters) - Bank borrowed more than $15 billion from the Bank of England’s U.S. dollar repo operations on Wednesday, the largest sum since the financial crisis, as the world’s central banks work to keep the financial system working during the coronavirus outbreak.

The BoE said it lent $8.210 billion of seven-day funds in its usual weekly dollar repo operation, and $7.245 billion in a new operation for 84-day funds which forms part of the new liquidity measures announced with other central banks.

The last time the BoE lent such a large volume of dollars to in a single day was in November 2008, when the world’s financial risked total collapse, and the last time it lent more dollars in a single operation was in February 2009.

On Tuesday banks borrowed the largest amount of six-month sterling funds from the Bank of England on Tuesday since the run-up to the 2016 Brexit referendum.

Unlike a decade ago, Britain’s banks have spent the last 10 years building up reserves of capital. Former BoE Governor Mark Carney said last week they were likely to be part of the solution to an economic crisis, rather than the cause.

The BoE said on Wednesday it fulfilled all the requests that it received for the U.S. dollar borrowing, which is secured against collateral.

A separate BoE repo operation on Wednesday to provide 7-day euro finance saw demand for just 5 million euros ($5.5 million)in funds, which the BoE fulfilled.

Reporting by Andy Bruce, editing by David Milliken

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